Merchant Market Can 'Revolutionise' Local Economy

THE Bahamas Trade Commission's co-chair yesterday threw his backing behind the proposed AsiaMart merchant emporium in Freeport, telling Tribune Business it could "revolutionise" the Bahamian economy and create "astronomical" benefits for local retailers, manufacturers and other entrepreneurs.

Raymond Winder

Raymond Winder, the Deloitte & Touche (Bahamas) managing director, said the planned one million square foot merchant trade market could help reduce the cost of imported goods for Bahamian retailers through diversifying supply sources via an influx of Chinese and Asian-manufactured goods.

Apart from reducing the Bahamas' heavy reliance on shipping all goods from Florida, Mr Winder said that by leaving inventory in AsiaMart's bonded Freeport warehouse until it was required, retailers and businesses located in New Providence and elsewhere could boost cash flow and inventory turn - since they would not have to pay the required Customs/import duties until the stock was brought out.

And Mr Winder, who is also the Bahamas' chief negotiator in its bid for full World Trade Organisation (WTO) membership, said AsiaMart could pave the way for Freeport to become a true regional distribution hub, and also help this nation when it came to dealing with 'Rules of Origin' regimes involved in most trade agreements.

Ken Hutton, the former Freeport Concrete and John S George chief who is among those spearheading the AsiaMart buyers emporium/merchant market, told Tribune Business in an interview yesterday that the project - if it comes to fruition - would have an estimated $400 million annual economic impact, and create between 6,000-8,000 direct and indirect jobs.

While Mr Hutton had described the project as "a game changer" for Freeport and the entire Bahamian economy, Mr Winder yesterday told Tribune Business: "I think this is more than just a game changer. I think it is revolutionary in terms of what it does.

"It is global in nature in that it seeks to reach beyond the shores of the Bahamas, so there is a base to generate foreign currency earnings coming into the country. It has great potential."

Praising Mr Hutton and his fellow directors/investors, who include Bahamian businessman Joe Thompson, for seeking to joint venture with major international partners, Mr Winder said one potential AsiaMart benefit "not being talked about" was the potential supply chain diversification it provided.

The Bahamas had been heavily reliant for years on the shipping lanes and supply routes flowing in and out of Miami and south Florida, and the relatively high costs that went with it.

"Because China is the largest manufacturer of products in the world, young Bahamian entrepreneurs could benefit significantly from having large volumes of Chinese goods coming into Freeport," Mr Winder told Tribune Business, "that they can now purchase, at a reasonable cost to be redistributed throughout the Bahamas.

"Bahamians will not have to rely as much as we did in the past on shopping in Florida to purchase these goods."

And, by holding inventory purchased at AsiaMart in a Freeport-based bonded warehouse, Mr Winder said companies - especially in sectors such as retail - would be able to "reduce their cost of [holding] goods on New Providence. This is tremendous for Bahamian entrepreneurs in the retail sector".

The Bahamas' chief WTO negotiator added: "The great potential about this is the benefit to Bahamian entrepreneurs. They can source goods at much more competitive costs..... It really benefits smaller entrepreneurs who do not have the capacity to carry large stocks of inventory. Smaller entrepreneurs are the big beneficiaries of this. This reduces their costs considerably."

Focusing on other market opportunities, the Deloitte & Touche (Bahamas) head said that many countries, including the US, often limited the volume of imported Chinese-manufactured goods they permitted in certain product categories, as a way to counteract the Asian nation's power.

By setting these maximum limits, Mr Winder said, countries limited the volume of Chinese imports unless some "value is added" elsewhere in the supply chain. And, in AsiaMart and Freeport's case, that presented an opportunity.

"Once this whole complex gets started, you have a venue for manufactured and light manufactured products where you can add value in Freeport and ship to different parts of the region," Mr Winder told Tribune Business. "Previously, this had limited potential because of the import limits."

He added that AsiaMart could also help to determine the origin of goods coming into the Bahamas with more certainty, something that would help certain product categories attract lower or "concessionary" import duty rates. Many goods coming from Florida, for instance, were often repackaged along the way, and it was impossible to determine where they originated from.

"One of the challenges we have as a country is, because most of the goods come in through Florida, is determining where products originated," Mr Winder explained. "It is so critical in trade agreements to meet rules of origin, because certain products attract certain concessionary rates.

"If this facility blossoms, it will allow us to far more easily determine the source of products. It goes a long way to meeting the requirements of the WTO and Economic Partnership Agreement (EPA).

"If you buy certain products from certain countries, you're supposed to be charged less duty than if you bought them elsewhere."

Suggesting that similar facilities might be attracted to Freeport if AsiaMart came to fruition, Mr Winder told Tribune Business: "This is not only a game changer. This is the kind of investment we need to happen.

"I think it's important that all of the players do whatever is necessary to approve such an investment, because the potential benefits to the Bahamas are just astronomical.

"What it does is that it allows the Bahamas to take advantage of that huge infrastructure in Freeport, and the fact we have shipping lanes that bring tonnes and tonnes of product allows us to become truly competitive in this field, whereas in the past we were not truly competitive."

And he added: "This is a huge diversification of the Bahamian economy in terms of what we had in the past. This is something that we've been trying to do as a country for many, many years, and we need to get behind Ken and his team to make this happen.

"Once Ken and his team get in place doing this, this will also attract others wanting to do the same thing."

Comments

This backward type of thinking by consecutive FNM and PLP governments is so damn outdated, just another step to place the Chinese interests over that of every other native Business Owner. I have always held the view that Pindling should have gone all the way with his the "bend of break" speech, to return Freeport back to the natives.
Why should a native business operator in Nassau, Abaco, or in any other part of our Bahamaland, be required to pay all custom duties upfront? For any government to continue along with the foreign ownership and control over our nation’s second city is all the evidence we need that in some import ways the natives have not advanced since our nation's Independence.

This market has the potential to boost local economy, but proper steps have to be taken to make this a reality. I am associated with a company that supplies geophysical instruments, we put in a lot of hard work to achieve success.